AbstractDense‐array (>64 channel) electroencephalography (EEG) systems are increasingly being used in simultaneous EEG–functional magnetic resonance imaging (fMRI) studies. However, with increasing channel count, dense‐array EEG caps can induce more severe signal dropout in the MRI images than conventional systems due to the radiofrequency shielding effect of the denser wire bundle. This study investigates the influence of a 256‐channel EEG cap on MRI image quality and detection sensitivity of blood oxygen level dependent fMRI signal. A theoretical model is first established to describe the impact of the EEG cap on anatomic signal, noise, signal‐to‐noise ratio, and contrast‐to‐noise ratio of blood oxygen level dependent signal. Seven subjects were scanned to measure and compare the T2*‐weighted image quality and fMRI detection sensitivity with and without the EEG cap using an auditory/visual/sensorimotor task. The results show that the dense‐array EEG cap can substantially reduce the anatomic signal in the brain areas (visual cortex) near the conducting wires (average percent decrease ≈ 38%). However, the image signal‐to‐noise ratio with and without the EEG cap was comparable (percent decrease < 8%, not statistically significant), and there was no statistically significant difference in the extent of blood oxygen level dependent activation. This suggests that the ability to detect fMRI signal is nearly unaffected by dense‐array EEG caps in simultaneous EEG–fMRI experiments. Magn Reson Med, 2012. © 2011 Wiley Periodicals, Inc.